Little v. Phipps
| Decision Date | 03 March 1911 |
| Citation | 94 N.E. 260,208 Mass. 331 |
| Parties | LITTLE v. PHIPPS et al. |
| Court | United States State Supreme Judicial Court of Massachusetts Supreme Court |
S. R. Wrightington, for plaintiff.
Phipps Durgin & Cook, for defendants.
This is a bill for an accounting in respect to various transactions between the plaintiff and defendant. The case was sent to a master. Upon the coming in of his report both parties filed objections and exceptions thereto. Certain of the plaintiff's exceptions were sustained and the others were overruled. The defendant's exceptions were overruled. A decree was entered in favor of the plaintiff. Both parties appealed from the order overruling their exceptions and from the final decree. REVIEWABLE--EVIDENCE. two transactions--the Allen estate so called and the St. James Terrace property--the others having been eliminated. The plaintiff was induced to purchase these estates by the recommendation of the defendant with a view to their resale. The plaintiff was to furnish and did furnish the funds to make the purchases, and title to both estates was taken in his name. In regard to the Allen estate it was agreed that the defendant should manage the property and should sell it, and that from the proceeds after deducting the expenses incidental thereto, the plaintiff should be repaid the money advanced by him, with 6 per cent. interest, and the net proceeds should be equally divided between the plaintiff and defendant, the same to be in full for the defendant's services. The property was sold at a profit, but in rendering an account to the plaintiff the defendant charged $50 as paid to an attorney for examining the title. In fact he paid only $25; and the plaintiff contends that the result of the defendant's action is to deprive him of any right to compensation.
In regard to the St. James Terrace property, the master finds that the agreement was that the defendant should attempt to sell the same, and until a sale should manage the same, attend to the necessary repairs and collect the rents, and for his services in managing the estate should receive one-half the net profits and should pay to the plaintiff the other half. In ascertaining the net profits 6 per cent. interest was to be allowed the plaintiff on the amount paid by him on account of the purchase, and if a sale was made the parties were to divide equally the net balance of the selling price after deducting the amount advanced by the plaintiff on account of the purchase. The property was purchased in May, 1904, and the defendant continued to manage it until January 1, 1906, when the plaintiff took charge of it in accordance with a notice which he gave to the defendant, and to which, so far as appears, the defendant did not object. During the time that the defendant managed the property he received a secret rebate or commission of 10 per cent. on all bills for repairs. The plaintiff contends that by reason thereof the defendant has lost any right which otherwise he would have had to compensation as in the similar case of the Allen estate. The master ruled that the defendant should account for the 10 per cent. thus received, but refused to disallow his claim to one-half the net profits received by him during his management of the property, and the court sustained the ruling subject to the plaintiff's objection and exception. In regard to the charge for the attorney's fee in the Allen case the master refused to rule as requested by the plaintiff that it constituted a fraud on him and deprived the defendant of all right to share in the net profits arising from the sale of the estate, and found and ruled that the plaintiff had failed to prove any fraud on the part of the defendant in connection with the management or sale of the estate. He found that it did not appear under what circumstances the discount was made, and declined to make any deduction on account of it. The justice of the superior court, however, allowed the defendant only what he actually had paid.
It is well settled that the agent is bound to exercise the utmost good faith in his dealings with his principal. As Lord Cairns said, this rule Parker v. McKenna, L. R. [1874] 10 Ch. 92, 118. See, also, Quinn v. Burton, 195 Mass 277, 81 N.E. 257; Wadsworth v. Adams, 138 U.S. 380, 11 S.Ct. 303, 34 L.Ed. 984; Murray v. Beard, 102 N.Y. 505, 7 N.E. 553. If the agent does not conduct himself with entire fidelity towards his principal, but is guilty of taking a secret profit or commission in regard to the matter in which he is employed, he...
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